Index Moves In Home Buyers' Favor

WASHINGTON — Increased family income and lower mortgage rates offset slightly higher home prices to make houses more affordable in March, the National Association of Realtors said Monday.

The association's housing affordability index rose 0.5 percentage points to 114.2 from a revised February level of 113.7. That followed a rise from 113.3 in January.

The index figure means that a family earning the national median income of $31,526 in March had 114.2 percent of the amount needed to qualify for a conventional loan covering 80 percent of the median existing-home price of $88,700. The median price represents the point at which half of all houses are more expensive and half less expensive.

''Clearly, lower mortgage rates were the big story in affordability for March,'' said John Tuccillo, the association's chief economist. ''We have, however, seen the best news in interest rates in 1988. Our forecast is for interest rates to drift upward for the rest of the year.''

The Federal Home Loan Bank Board reported that the average effective interest rate on adjustable-rate mortgages for existing homes was 8.37 percent in March, compared with 10.04 percent for fixed-rate mortgages.

That was down from February's 8.51 percent for adjustable-rate mortgages and 10.51 percent for fixed-rate mortgages.

From February to March, the national median home price rose $600 to $88,700, while the median family income rose $142 to $31,526, the association said. The trade group's guidelines put required annual household income at $30,000 to qualify for a mortgage on a $95,000 house, $40,000 for a $126,500 house and $60,000 for a $190,000 house.